Q–I’ve been intrigued with many of the events involving the aerospace industry. I’d like to know which of these companies’ stocks are most recommended by the analysts at Wall Street brokerage firms.
A–Some stocks in this group may indeed be headed into the stratosphere.
Most-admired stock in the aerospace group these days is Boeing Co., which recently pulled out of a partnership to develop a next-generation space shuttle. It has seven “strong buy” and five “buy” recommendations, according to the Boston-based First Call Corp. research firm.
Though enmeshed in labor strife this year, McDonnell Douglas receives four “strong buys” and three “buys.” Lockheed Martin Corp., which has predicted greater international sales of its military transport planes, follows with three “strong buys” and four “buys.”
Among other companies garnering consensus “buy” recommendations are General Dynamics Corp., CAE Inc., Gilat Satellite Networks Ltd., Litton Industries and Sundstrand Corp.
Q–My husband and I are 51 and 44 respectively. We’re self-employed, so we put the maximum allowable into a SEP (simplified employee pension plan). Several years ago we began investing in mutual funds and we’re willing to be fairly aggressive. Our holdings include $52,400 in Dreyfus Growth & Income Fund. What’s your opinion?
A–You’ve chosen a unique fund that may not be the best choice for folks with aggressivness on their minds. It’s more conservative than many other growth and income funds, and returns haven’t been particularly distinguished.
The $1.9 billion Dreyfus Growth & Income Fund rose 25 percent over the past 12 months to rank in the lower quarter of growth and income funds. Its three-year annualized return of 13 percent was similarly in the lower 25 percent of its peers.
This broadly diversified fund, run by Dreyfus chief economist Richard Hoey since 1991, is unusual among income-oriented funds in that it sometimes holds as much as 25 percent of assets in convertible securities. It also frequently holds a lot of cash. Because of its unconventional approach, the fund tends to do well when the rest of the growth and income group does badly, and vice versa. While its main emphasis is domestic stocks, Dreyfus Growth & Income holds foreign stocks and bonds in addition to those convertibles.
Since Hoey expects economic growth, his largest holdings were recently cyclicals, financials and health care. He doesn’t make enormous bets on any one sector and has never taken huge losses. Top holdings recently included First Financial Management bonds and the stocks General Motors “Class E”, Lowe’s Companies, Johnson & Johnson, Time Warner Inc. and OfficeMax Inc.
“Hoey tends to think in terms of where the economy and industries are headed, rather than choosing which companies represent the best long-term fundamental values,” explained Hal Ratner, analyst with the Morningstar Mutual Funds investment advisory.
Dreyfus Growth & Income is a “no-load” (no initial sales charge) fund requiring a $2,500 minimum initial purchase.
Q–I have had several disputes with my broker. How should I go about resolving them? Is arbitration the way to go?
A–First, try to work out the problem with the broker. If that doesn’t pan out, go to the branch office manager with your written complaint. Next in the chain of command would be the general counsel or director of compliance at the brokerage firm’s head office.
All else failing, the arbitration process comes next and requires a written statement of the claim. You don’t have to use an attorney, but it’s probably a good idea. Arbitration resolves a dispute through impartial individuals called arbitrators. There’s typically a panel of three, with two of them from outside the securities industry.
A controversy isn’t eligible for arbitration if six years have elapsed from the date of the event. The award from these proceedings is final and binding, subject to review by a court only on a very limited basis.
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Andrew Leckey, who co-anchors the “Today’s Business” program on the CNBC cable television network each weekday from 5 to 7 a.m., answers questions only through the column. Address inquiries to Andrew Leckey, “Successful Investing,” Suite 367, 76 N. Maple Ave., Ridgewood, N.J.
